Starter questions: Legal structure and costs with a South African partner

[Peter Kay]

I have a friend in South Africa that has access to some IT services. He invited me to try outsource them to Dutch companies and we share the profit. I'm a complete entrepreneur beginner and have the following concerns.

 

I expect the following expenses: forex to pay my SA suppliers. Business insurance. A business bank account. Possibly an accountant? What did I miss?

 

I think that VAT returns will complicate monthly profit payouts to me and my partner. I would receive payment from my customers, then send money to South Africa. It's at this point that I could send my partner his share of the profit. But I think I would also get money back from VAT because I am paying for services from South Africa and would not need to charge VAT to them. How would my quarterly tax returns work?

 

If my partner starts a company in South Africa, we would lose the VAT benefits of paying directly to the supplier. That is because if I send money to a company my SA partner starts, he doesn't need to charge me VAT. But then he'd send an invoice to the supplier and they would charge him VAT. Therefore the optimal flow of money would be the Dutch customer pays me, and I pay the supplier in SA. Then the supplier wouldn't need to charge me VAT and we increase our profit.

 

What are my options and what should I consider? I plan to start an eenmanschap until I can afford the fees for a BV upgrade, if that's relevant?

 

Thank you for your time and expertise.

[Joost Rietveld]

Welcome to the Forum, Peter. 

 

8 uur geleden, Peter Kay zei:

What did I miss?

Laptop, phone, travel expenses, to name but a few

 

8 uur geleden, Peter Kay zei:

How would my quarterly tax returns work?

When dealing with foreign VAT buy some hours of explanation services from a bookkeeper with experience in that field. Explaining this in a forum post is not likely to come across well.

 

8 uur geleden, Peter Kay zei:

Then the supplier wouldn't need to charge me VAT and we increase our profit.

 

That's highly unlikely. VAT is usually a zero sum game. If you import services or goods from SA you are paying the VAT directly to the Dutch government. Not through the invoices of your SA partner.

 

What your options are and if your choice of the Eenmanszaak is the best, that's impossible to be definitive about. It probably is, but there are plenty reasons to not choose an eenmanszaak 

[Peter Kay]

12 hours ago, Joost Rietveld said:

That's highly unlikely. VAT is usually a zero sum game. If you import services or goods from SA you are paying the VAT directly to the Dutch government. Not through the invoices of your SA partner.

What I meant is that I would charge VAT to my Dutch client. Then I would pay that to the Dutch government.

But on the South African side, I understand that the invoice they send me would be without VAT. They would state something like “VAT shifted to Netherlands” and quote my KVK number.

 

But you did say:

12 hours ago, Joost Rietveld said:

When dealing with foreign VAT buy some hours of explanation services from a bookkeeper with experience in that field.

I won't dig any further.

 

Thank you for your reply!

[Joost Rietveld]

10 uur geleden, Peter Kay zei:

They would state something like “VAT shifted to Netherlands” and quote my KVK number

That means that you have to declare VAT to the Dutch government, but you can subtract that same amount as input VAT. As I said, a zero sum game